chapter. National Differences in Political Economy. McGraw-Hill/Irwin Global Business Today, 5e. © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. 2. INTRODUCTION This chapter explores how the political, economic, and legal systems of countries differ.
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National Differences in Political Economy
Global Business Today, 5e
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
This chapter explores how the political, economic, and legal systems of countries differ.
Together these systems are known as the political economy of a country.
A political system is the system of government in a nation
Political systems can be assessed according to:
the degree to which they emphasize collectivism as opposed to individualism
the degree to which they are democratic or totalitarian
Collectivism and Individualism
Democracy and Totalitarianism
A free market system is likely in countries where individual goals are given primacy over collective goals
State-owned enterprises and restricted markets are common in countries where collective goals are dominant
The legalsystem of a country is the rules, or laws, that regulate behavior, along with the processes by which the laws of a country are enforced and through which redress for grievances is obtained.
Different Legal Systems
Differences in Contract Law
Property Rights and Corruption
The Protection of Intellectual Property
Product Safety and Product Liability
THE DETERMINANTS OF ECONOMIC DEVELOPMENT
Differing political, economic, and legal systems can have a profound impact on the level of a country's economic development, and hence on the attractiveness of a country as a possible market and/or production location for a firm.
Differences in Economic Development
Broader Conceptions of Development: Amartya Sen
Political Economy and Economic Progress
Geography, Education, and Economic Development
STATES IN TRANSITION
Since the late 1980s, a wave of democratic revolutions has swept the world, and many of the previous totalitarian regimes collapsed
There has been a move away from centrally planned and mixed economies towards free markets
STATES IN TRANSITION
The Spread of Democracy
The New World Order and Global Terrorism
The Spread of Market-Based Systems
The Nature of Economic Transformation
Implications of Changing Political Economy
IMPLICATIONS FOR MANAGERS
Political, economic, and legal systems of a country raise important ethical issues that have implications for the practice of international business
The political, economic, and legal environment of a country clearly influences the attractiveness of that country as a market and/or investment site